Extracorporeal shock wave lithotripsy (ESWL) is a non-invasive emerging technology that may have an important role in the treatment of the millions of patients with gallstones. Optimal utilization of gallstone ESWL requires careful assessment of overall effectiveness and cost, as well as assessment of patient valuation of potential outcomes. We have defined clinically important short-term and long-term outcomes of ESWL and cholecystectomy, estimated the probability of their occurrence, and designed a computerized Markov model to compare total expected costs and quality-adjusted survival for patients treated with ESWL or cholecystectomy. The specific aims of the proposed project are to: 1) estimate patient and physician valuations of the defined outcomes of gallstone ESWL and cholecystectomy; 2) estimate the total cost of each therapy; 3) incorporate these estimates into a cost-effectiveness analysis of ESWL vs. cholecystectomy; and 4) determine how cost-effectiveness varies according to patient characteristics. Our broader goal is to develop an approach that can be used to estimate the cost-effectiveness of other emerging technologies. The utility that patients and physicians would assign to potential outcomes of gallstone treatment will be determined by administering a questionnaire to 40 randomly selected outpatients stratified by age and sex, and to 10 surgeons, 10 gastroenterologists, and 10 radiologists. The questionnaire will use ordinal ranking, relative rating, and time-trade-off techniques to measure how these individuals value each outcome. The resulting values will be compared between groups and will be the basis for quality- adjustment of survival estimates. The cost of hospital services for cholecystectomy and induced procedures will be derived from Maryland Health Services Cost Review Commission and California hospital discharge data for 1987-88. The cost of hospital services for ESWL will be derived from the John Hopkins Hospital case mix records for January to March 1989. The cost of professional services for surgical procedures will be obtained from Part B Medicare claims data for 1987-88. Current professional fee charges for ESWL will be obtained from hospitals operating biliary lithotripters. Finally, the utility and cost data will be incorporated into the computerized Markov model to compare total costs and quality-adjusted 5-year survival for ESWL vs. cholecystectomy. Sensitivity analyses will assess how cost- effectiveness varies with age, sex, gallstone features, clinical risk factors, and utility values.